At independence, with Malaya roughly 53 percent Malay, 36 percent Chinese, and 11 percent Indian, Malay is chosen as the official language. Forty-one percent of the Chinese population is denied citizenship under constitutional rules favoring ethnic Malays. This bias, combined with Chinese economic preeminence, stokes Malay-Chinese tensions.
Singapore and North Borneo join Malaya to create the Federation of Malaysia in 1963. With more than 75 percent of Singapore's population Chinese, the Federation's racial balance is upset. The confrontation with Indonesia in 1963 deflects racial tension and helps build national unity, until power struggles and ethnic conflict force Singapore out of the Federation.
Malays are the majority community but enjoy only 2 percent of corporate ownership. Chinese domination of the economy is a source of simmering anger among Malays, sparking the massive 1969 riots. The United Malay National Organization (UMNO) expels Dr. Mahathir bin Mohamad for his criticism of Abdul Rahman's handling of the crisis. Mahathir's pro-Malay tract, "The Malay Dilemma," is banned.
The New Economic Policy (NEP) establishes preferential treatment for Malays in society, the government, and the economy as remedies until the target goal of 30 percent Malay equity in the economy is reached. The Rukunegara, a statement of national principles stressing loyalty to country and king, respect of the constitution and the rule of law, is promulgated to promote national unity.
An upturn in Chinese disaffection and Islamic fundamentalism fail to derail Malaysia's remarkable stability. A surging economy and the NEP welfare programs help alleviate social tension. The Bumiputra Investment Foundation, headed by Mahathir, is founded in 1978 to provide ordinary Malays access to cheap loans. It dispenses units of 10 Malay dollars, accessible to any Malay.
Mahathir urges Malaysians to shed their colonial mentality and "Buy British Last." Malaysia's "Look East" policy promotes hardworking postwar Japan as a model to emulate. The slogan "Malaysia Inc." characterizes the nation as a smooth-running corporation. The Malaysian Trade Union Congress (MTUC) is the largest union, but strikes are rare.
In 1990 Malaysia unveils "Vision 2020," an ambitious project to achieve full development by the year 2020. The boom attracts illegal immigration, and Malaysia draws international criticism in 1991 for its treatment of Vietnamese boat people. Increasing urbanization results in higher crime rates and other social ills. By 1995, almost 70 percent of the population lives in urban areas.
The September 1998 dismissal and subsequent arrest of Deputy Prime Minister Anwar Ibrahim cause unrest, but Mahathir stands firm, and the crisis abates. Malaysia curtails Islamic political activity after the 2001 World Trade Center attack in New York spotlights Islamic terrorism.
Malaysia's ability to withstand the financial crisis and 2001-02 global slowdown shores up Mahathir's position despite concerns over his authoritarian ways. Media remain tightly controlled; live broadcasts are required to submit scripts in advance. Islamic law is passed in one state, highlighting the potential for religious turmoil. But Malaysia remains a generally prosperous multi-ethnic society.
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